L&T Finance Limited

Financial Services — Credit Services · NSE

₹253.85−₹8.15 (−3.11%)

DalalBaazaar Score

81 / 100

🟢 Strong

Verdict

ATTRACTIVE

Risk

Low

Driven by negative free cash flow.

In simple words: Reasonable but unspectacular business quality, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:47 pm

Understanding the Business

Company site ↗

The 60-second version of L&T Finance Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

L&T Finance Limited, a non-banking financial company, provides various financial products and services in India.

IndustryCredit Services

SectorFinancial Services

Employees41,301

Annual revenue₹10,635 Cr

How does it make money?

Turns over ₹10,635 Cr a year. Of every ₹100 of sales, about ₹28 reaches shareholders as profit. Each of its 41,301 employees supports ₹25.8 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹25.8 lakh

Who are its competitors?

The closest listed comparisons in its industry are BAJAJ FINANCE LIMITED, STATE BANK OF INDIA, HDFC BANK LTD, ICICI BANK LTD.. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Not assessable from these ratios

For a lender, returns on capital are shaped by leverage and funding cost rather than by pricing power, so the usual financial signature of an advantage does not apply. Judge this one on deposit franchise, cost of funds and asset quality — none of which are in this data.

Peer median ROE16.5%

What is the outlook?

16 analysts covering the stock expect revenue to grow about 18.4% and earnings to grow about 21.8% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.

Est. revenue growth+18.4%

Est. earnings growth+21.8%

Analysts16

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +63% while net margin moved +13% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+63%

Margin effect+13%

DalalBaazaar Score

81/ 100

Strong

Weighted across six categories. Every point is explained below.

• P/E of 18.6x is within a normal band
• P/E is close to its own historical median of 22.7x

Quality vs. Valuation

Company Quality

87/ 100

Excellent

How good the business is, ignoring the share price entirely.

Valuation

65/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

18.6x

3Y Median

22.7x

40 monthly readings · mean 22.7x · range 14.5x–29.9x

Sector Median

17.0x

median of 4 sector peers

🟢Current valuation is approximately 18% below its 3y median of 22.7x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟡Against its sector it is priced broadly in line with the peer median of 17.0x.

vs. its own history

Fair

22.7x median over 40 months · -18%

vs. sector peers

Fair

17.0x median of 4 peers · +10%

vs. generic bands

Fair

15x–35x

EV/EBITDA

—

PEG

0.83

What's Good / What's Bad

🟢 What's Going Well2

Return on equity is rising
ROE has improved from 7.5% to 10.7%.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention0

Nothing stands out as clearly deteriorating on the years of data available.

Red Flags

No automated checks triggered

None of the automated financial checks below were triggered on the years of data available. That is not the same as a clean bill of health — see what could not be checked.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

No clear risk case emerges from the available numbers — which is not the same as there being none.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 13% a year✓ 17.7% CAGR
Latest reported year was 31.4%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2Return on equity stays above 10%✓ 12.3%
For a lender this is the cleanest single read on whether the book is being grown profitably.
3Valuation vs its own median of 22.7x✓ 18.6x today
A re-rating above its own history needs a reason; without one it is just a higher price.

Investment Checklist

7 / 11 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✓ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✗ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✓ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

3 good · 6 neutral · 2 weak

Market Cap

₹63,625 Cr

Mid Cap

Mid-sized — more growth headroom, but sharper swings than large caps

P/E (Trailing)

18.6x

Fair

Fairly valued against the generic band

P/B Ratio

2.17x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹13.63

Profitable

Profitable on a per-share basis

ROE

12.3%

Moderate

Moderate capital efficiency

ROCE

Not meaningful

N/A for lenders

Banks and NBFCs don't report capital employed the way other businesses do

Debt/Equity

4.23x

High

High leverage

Revenue Growth (YoY)

31.4%

Healthy

Healthy top-line growth

Profit Growth (YoY)

32.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

1.08%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹14,429 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

P/E (Forward)

13.4x

Improving

Below the trailing multiple — the street expects earnings to grow into the price

ROA

2.4%

Weak

Assets generate little profit

Operating Margin

45.7%

Good

Healthy core-business profitability

Net Margin

33.2%

Good

Strong bottom-line conversion

Current Ratio

52.59

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.68

Defensive

Steadier than the market

52W Range Position

18%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

274.7 / 297.8

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

24.1

Oversold zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹6,521 Cr	₹7,859 Cr	₹9,669 Cr	₹10,635 Cr	+17.7%
PAT (Net Profit)	₹1,623 Cr	₹2,320 Cr	₹2,644 Cr	₹2,981 Cr	+22.5%
EPS	₹6.54	₹9.3	₹10.57	₹11.88	+22.0%
ROE	7.5%	9.9%	10.3%	10.7%	—
Total Debt	₹83,105 Cr	₹76,603 Cr	₹92,372 Cr	₹1.10 L Cr	+9.9%
Free Cash Flow	₹6,590 Cr	₹567 Cr	-₹16,783 Cr	-₹14,429 Cr	—

🟢 Revenue has grown at 17.7% a year over 3 years.

🟢 PAT (Net Profit) has grown at 22.5% a year over 3 years.

🟢 EPS has grown at 22.0% a year over 3 years.

🟢 ROE has risen from 7.5% to 10.7% over 3 years (+3.1 pts).

🔴 Total Debt has grown at 9.9% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹6,590 Cr to -₹14,429 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹1.42 L Cr

Total Liabilities

₹1.14 L Cr

Cash & Equivalents

₹5,878 Cr

Operating Cash Flow

-₹14,189 Cr

Capex

-₹239 Cr

Shareholding (proxy)

Institutional Holding

19.5%

Insider Holding

65.9%

Corporate Actions

Next Earnings

15 Jan 2027

Dividend Rate

₹2.75

Ex-Dividend Date

22 May 2026

Analyst Consensus

Recommendations

16 Buy · 2 Hold · 3 Sell

Target Price (Mean)

₹328.43

+29.4% vs CMP

Target Range

₹210 – ₹375

Peer Comparison

Company	P/E	ROE
BAJAJ FINANCE LIMITED	30.2x	17.8%
STATE BANK OF INDIA	10.3x	15.2%
HDFC BANK LTD	15.9x	13.8%
ICICI BANK LTD.	18.1x	16.5%

Recent News

1 positive3 mixed2 general

HBL Engineering, Wipro, L&T Finance shares spurt amid spike in volumes; check full list

Upstox, 16 Oct

L&T Finance (BSE:533519) Stock Forecast & Analyst Predictions

Simply Wall Street, 08 OctAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

L&T Finance shares fall up to 6% despite strong Q2; Analysts project up to 31% upside

CNBC TV18, 16 OctPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

L&T Finance Q2 net profit rises 33% to Rs 975 crore

The Economic Times, 15 OctResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

HBL Engineering (NSE:HBLENGINE), Wipro and L&T Finance Trading Volumes

Kalkine India, 16 Oct

Why L&T Finance Share Plunged Today?

Equitymaster, 24 SeptPrice move

🟡Mixed / dependsA price move rather than a change in the business. If the figures on this page have not moved, the fall is either an opportunity or news they have yet to catch up with.

Watch Items

This is a financial-sector business: borrowing is its raw material, not leverage in the usual sense. Debt/Equity and ROCE here aren't comparable to a manufacturer's — read them alongside NIM, GNPA and capital adequacy from the company's own disclosures.
Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in oversold territory — could mean either a bargain or a stock still falling for good reason. Check the 'why' before assuming reversal.

DalalBaazaar Thesis

StrongBusiness Quality · Financial Health · Growth · Profitability

MiddlingValuation · Risk

Points for each in the Score ↑

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself.

All 3 tripwires holding · see Key things to watch ↑